According to me, the cheapest beer you get in Reykjavík is at Sjöan  and Ölsmiðjan.  

Sjöan is a tiny adorable bar, it is conveniently  located across from a karaoke bar, so be careful.

Ölsmiðjan is on Lækjargata, not only a cheap beer but a flattering ego boost as well from the doorman as he asks you for an ID.









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